Graphcore, a U.K. chip company, has officially been acquired by SoftBank, a Japanese company.
There have been rumors about the deal for some time, but due to prolonged negotiations and regulatory approvals, neither company has confirmed anything until now.
The exact value of the acquisition remains undisclosed, although there have been reports suggesting a figure of $500 million.
However, Graphcore’s co-founder and CEO, Nigel Toon, has stated that this figure is inaccurate. He also mentioned that they have agreed with SoftBank not to disclose the details of the deal at this time.
Once positioned as a competitor to Nvidia, whose valuation has surged due to high demand for AI chips, Graphcore from Britain has faced challenges in securing necessary investments.
With a valuation of $2.77 billion in 2020, a disclosed filing indicated that Graphcore required additional funding to reach profitability.
The company had reduced its workforce by 20% to 494 employees and closed operations in Norway, Japan, and South Korea.
During a media briefing, CEO Nigel Toon acknowledged the hurdles Graphcore had encountered and expressed that the SoftBank deal would provide the company with the resources required to compete globally.
Toon remarked on the rapid and substantial nature of the investment, stating that despite being a relatively small company compared to its competitors, Graphcore has successfully developed top-tier technology and competed on a global scale.
Toon, who will continue in his position, chose not to disclose the amount paid by SoftBank for the company.
When considering the state of the British tech industry, Toon pointed out that British pension funds have historically been unwilling to invest in rapidly growing startups, which has hindered growth.
“There is a significant opportunity here, but there are still many structural issues that need to be addressed,” he commented.
“In terms of where our funding originated, some of it came from the UK, but the majority came from other regions. This is the reality, and it’s an aspect that we need to address moving forward.”
Regarding a potential collaboration with Arm Holdings, the primary chip designer also owned by SoftBank, Toon mentioned that Graphcore would collaborate with partners across its parent company’s portfolio.
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